Optus v Leighton

 

6/3/1997 - 31/6/1998 & 12/2/2001 - 25/10/2001 (Court Hearing)

These proceedings arise out of damage to premises and equipment at the Optus Communications Rosebery Data Centre that occurred on 3 January 1997. Water contaminated with rust was accidentally discharged from a Gas Suppression System into the data centre affecting $120M AUD worth of computing equipment. It was Optus' primary computing centre. The total damages claim was $29,695,816.63 AUD.

  • First Defendant: Leighton Contractors Pty Limited
  • Second Defendant: Norman Disney & Young & Partners Pty Limited
  • Third Defendant: Tyco Australia Pty Limited

My initial terms of reference included, but were not limited to:

  1. Review and comment on procedures adopted by Optus to reinstate their computer systems.
  2. Assist and advise on the scope of repair/replacement to computer systems.
  3. Assist and advise on the quantum and cost effectiveness of all matters pertaining to the repair/replacement of the computer system.

In respect of my role, a meeting was held with Optus on 6 March 1997, which resulted in a letter clarifying and extending my role in the recovery project. I accepted the following terms:

  • To ensure independent assessment, mitigate all costs, acting on and able to provide decisions on behalf of their Insurers.
  • To ensure aspects are fair and reasonable, based on premise that the business is to be up and running as before the incident.
  • It was not my role to authorise expenditure, but to review and 'concur' with expenditure as appropriate.
  • Role basis was to vet and ensure that all required information was available for each decision and that supporting facts are bundled with decision.

The Data Centre Recovery Plan (DCRP) involved the recovery of about 70 different information systems located in 180 cabinets which all had to be relocated along with 83 migrations of computing applications.

There were significant constraints, which required that it be completed within the shortest possible timeframe. To manage this task a high level schedule was created that mapped what was believed to be the most optimal way of relocating the cabinets whilst spending the least amount of money. Six parallel migration streams were run, with some interdependency between streams. The task of relocating all these systems was an incredibly complex one, where the variables of hardware availability, human resource availability and changing business priorities created an environment where the schedule of relocations was changing on an almost daily basis.

I played the role of "Devil's Advocate" which took form at a three levels. The first level was to discuss the various recovery options in principle with Optus Engineers and to assist develop the option that appeared to be the most fair and reasonable, and directly related to the incident. The second level was to review a detailed business case prepared by Optus arguing for the particular strategy or cost expenditure. I would then either 'concur' with it or exercise it with further argument and debate. The third level involved sighting and concurring with the actual purchase orders and invoices raised. My 'concurrence' was sought on ALL EXPENSES, projected and actual (with the exception to the Relectronic-Remech expenses because of commercial sensitivity concerns expressed by Relectronic-Remech).

The case was heard in the Equity Division, Construction List of the Supreme Court of NSW in 2001. The hearing went for 76 days over 8 months and I appeared briefly as an expert witness. The following is an extract from the judgement of Hunter J.

'Mr Cousins was a consultant with considerable experience "in the recovery of businesses suffering a loss or disaster". [He] enjoyed an impressive client list which represented something in excess of $100,000,000 in insurance losses in active files at any one time between July 1998 and December 1999. The clients were distributed amongst insurers, loss adjustors and insured parties. He had extensive experience in "disaster recovery exercises involving particularly fire contamination of computer equipment"'.

Original Judgement (1.3MB)

  Appeal Judgement (146KB)